Agreement Reached on New Credit Hire Rates

Motor Insurers and credit hire companies have signed an interim agreement on increasing certain hire rates to enable both sides to navigate their way through the current headwinds in the motor claims supply chain. The agreement is for subscribers to the GTA, an industry protocol that streamlines and removes friction from the settlement of credit hire claims.

Under the terms of the GTA, credit hire companies accept lower average hire rates in return for faster payment, with both sides saving on legal costs. From 1 October, maximum daily settlement rates for most vehicles increased by 7.5%. Motorbikes increased by 5.0%,. NT4 taxis also saw hire rates increased by 7.5%, while all other taxi classes went up by 2.5%.

INFLATIONARY CYCLE

Nobody really knows how long the current inflationary cycle will continue for of course. But the interim agreement will apply until 30 June next year at the latest, by which time it is hoped that a more comprehensive set of rates will be finalised following the completion of detailed rates research by external consultants.

Anthony Hughes, chairman and CEO of the Credit Hire Organisation (CHO) which represents the UK credit hire sector, said the interim agreement will enable customers to continue to access mobility while their own vehicle is off the road following an accident.

“Our members have been significantly affected by bottlenecks in the supply chain, including access to vehicles, a tightening in the supply of new vehicles and across the board hikes in hire rates which weren’t reflected in the GTA.”

He added: “A compromise will never tick the boxes for all our members, and I know that this has been a tough process, but we feel this interim deal will at least ease some of the pressure on our members and reduce the risk that customers would struggle to access the mobility they need.”

On behalf of motor insurers, Steve Hiscock, who leads the motor insurers group on the GTA, said: “I’m pleased we’ve been able to come to an agreement for the benefit of our customers. It underlines the value of the GTA as a means of achieving a consensus approach to these significant challenges through cooperation and compromise.”

FUTURE TRENDS

“It is important that we build on this temporary arrangement during the next few months to put in place a GTA that is able to meet the challenges posed by the rapidly changing environment in our sector.”

He explained that credit hire companies and motor insurers have also been meeting to explore how the GTA can be revised to become fit for purpose in the 2020s.

Anthony Hughes added: “I hope the spirit of cooperation between CHCs and motor insurers that appeared during the pandemic, and now has resulted in the interim agreement on rates, can continue through the next series of discussions to re-boot the GTA.”

“Self-regulation in the credit hire sector remains the most appropriate means of making sure the needs of customers requiring mobility are met.”

About alastair walker 10121 Articles
20 years experience as a journalist and magazine editor. I'm your contact for press releases, events, news and commercial opportunities at Insurance-Edge.Net

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